Correlation Between Punjab Sind and Computer Age
Can any of the company-specific risk be diversified away by investing in both Punjab Sind and Computer Age at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Punjab Sind and Computer Age into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Punjab Sind Bank and Computer Age Management, you can compare the effects of market volatilities on Punjab Sind and Computer Age and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Punjab Sind with a short position of Computer Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of Punjab Sind and Computer Age.
Diversification Opportunities for Punjab Sind and Computer Age
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Punjab and Computer is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Punjab Sind Bank and Computer Age Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Age Management and Punjab Sind is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Punjab Sind Bank are associated (or correlated) with Computer Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Age Management has no effect on the direction of Punjab Sind i.e., Punjab Sind and Computer Age go up and down completely randomly.
Pair Corralation between Punjab Sind and Computer Age
Assuming the 90 days trading horizon Punjab Sind Bank is expected to under-perform the Computer Age. But the stock apears to be less risky and, when comparing its historical volatility, Punjab Sind Bank is 1.14 times less risky than Computer Age. The stock trades about -0.04 of its potential returns per unit of risk. The Computer Age Management is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 354,205 in Computer Age Management on September 12, 2024 and sell it today you would earn a total of 166,910 from holding Computer Age Management or generate 47.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Punjab Sind Bank vs. Computer Age Management
Performance |
| Timeline |
| Punjab Sind Bank |
| Computer Age Management |
Punjab Sind and Computer Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Punjab Sind and Computer Age
The main advantage of trading using opposite Punjab Sind and Computer Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Punjab Sind position performs unexpectedly, Computer Age can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Computer Age will offset losses from the drop in Computer Age's long position.| Punjab Sind vs. Generic Engineering Construction | Punjab Sind vs. EIH Associated Hotels | Punjab Sind vs. Taj GVK Hotels | Punjab Sind vs. Viceroy Hotels Limited |
| Computer Age vs. Reliance Industries Limited | Computer Age vs. Oil Natural Gas | Computer Age vs. Indian Oil | Computer Age vs. HDFC Bank Limited |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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